Why closing at the end of the moth is best

It really has to do with lowering buyer out of pocket expenses by minimizing the amount of prepaid interest a buyer pays on the mortgage at closing.

Interest on a mortgage starts from the date the contract closes, but the majority of loans are due on the first day of the month. So when the loan closes, pre-paid interest between the closing date and the end of the month is taken out.

For instance, if closing takes place on the 29th of December, buyers would prepay one day of interest to cover the rest of December’s interest fees. The first payment will be due February 1st.  Another example is if closing takes place on the 4th of November, you prepay 26 days of interest. This means bringing more cash to close the transaction. But obviously, the benefits of end of month closings are only short term.

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